Leaders in Kenya’s cooperative movement have intensified pressure on Parliament to amend the proposed Sacco Societies (Amendment) Bill, warning that several clauses risk diluting the identity and operational independence of Savings and Credit Cooperative Organisations (SACCOs).
The Co-operative Alliance of Kenya (CAK), the umbrella body representing the country’s cooperative sector, tabled a detailed memorandum before the National Assembly Departmental Committee on Trade, Industry and Cooperatives, urging lawmakers to adopt sector-specific reforms that protect SACCOs from what it termed “misaligned” banking-style regulations.
The submission was presented during a committee sitting chaired by Ikolomani MP Hon. Bernard Masaka, CBS, bringing together cooperative sector leaders, principal secretaries and technical experts for deliberations on the contentious bill.
At the centre of the Alliance’s concerns is the proposed use of the term “Credit Union” in the legislation. CAK argued that the phrase fails to capture the defining savings-and-credit structure that has historically distinguished Kenyan SACCOs from purely credit-based cooperative systems used in other jurisdictions.
Sector leaders maintained that the cooperative movement’s strength lies in its member-driven savings mobilisation model and warned that altering the terminology could fundamentally distort the sector’s identity.
The Alliance also raised concerns over the proposed Stabilisation Protection Scheme, recommending that the mechanism be administered directly by the Sacco Societies Regulatory Authority (SASRA) rather than through structures that could increase the financial burden on member societies.
ALSO READ:
Basket of changes presents do-or-die moment for Kenya’s co-operative sector
According to CAK, the fund should draw support from multiple financing streams, including industry penalties and private capital injections, instead of relying heavily on contributions from SACCO members.
The memorandum further opposed proposals seeking to align SACCO deposit protection with the Kenya Deposit Insurance Corporation (KDIC), arguing that KDIC was specifically designed for commercial banking institutions and not cooperative entities.
CAK warned that merging the two systems would undermine cooperative principles such as autonomy, democratic ownership and member control.
Committee Chairperson Bernard Masaka welcomed the cooperative sector’s structured submissions, saying Parliament remained open to additional views aimed at strengthening the legislation.
“We are happy to engage you. If you feel you have some information that would help the committee develop this bill better, please do not hesitate to bring it to us,” Masaka said.
The chairperson also indicated that the committee was prepared to recall the Committee of Experts to address technical concerns raised by stakeholders before the bill proceeds to the next legislative stage.
Vice Chairperson Marianne Kitany (Aldai) called for alignment between the government’s position and recommendations already developed by the Committee of Experts, cautioning against contradictory regulatory proposals.
“My view is that the PS should step down his presentation so that we can engage again on this issue of the report of the Committee of Experts and what he’s presenting and alignment with the cooperative alliance,” Kitany stated.
Her remarks underscored growing concern within the committee over possible inconsistencies that could complicate implementation of the law once enacted.
ALSO READ:
Oparanya briefs senators over KUSCCO’s KSh12B deficit as SACCO reforms intensify
The session also heard sharp criticism from SACCO industry players opposed to the importation of banking and microfinance regulatory frameworks into the cooperative sector.
Kenya National Police SACCO Chief Executive Officer Solomon Atsiaya argued that SACCOs had thrived precisely because of their unique operational structure and member-centred approach.
“Our circles are actually performing better. The regulatory framework there has constrained them on how they do their business. This model has worked — why can’t we protect this model that has worked and then empower our regulator, SASRA, to regulate our circles very well?” Atsiaya posed.
He urged lawmakers to consider recalling the bill for further refinement to fully incorporate recommendations contained in expert reports before advancing it through Parliament.
The Trade, Industry and Cooperatives Committee is expected to hold additional sittings to harmonise the positions of government agencies, the Co-operative Alliance of Kenya and sector experts.
Among the unresolved issues are the financing structure of the proposed Stabilisation Protection Scheme, the legal definition of eligible entities under the law, and compliance timelines for SACCOs expected to transition into the new regulatory framework.
CAK has appealed for realistic implementation timelines and sustainable reforms that will not erode member value, particularly for smaller community-based SACCOs with limited financial capacity.
Even as consultations continue, cooperative sector leaders have maintained that they are ready to support legislative reforms, provided the final law preserves the principles of member ownership, sector-specific regulation and savings mobilisation that have long defined Kenya’s SACCO movement.
By Godfrey Wamalwa
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
